Our market development work is important to achieving our statutory objective to promote competition in, reliable supply by and the efficient operation of the electricity industry for the long-term benefit of consumers.

If an anomalous event or outcome occurs in the market or the broader electricity sector, we investigate it to determine the causes and whether something can or should be done to prevent such an event or outcome from occurring again.

What happens if the hydro lakes are low?

Over 50 per cent of New Zealand’s electricity is generated from large hydro-electric stations in the South Island. If there is low rainfall it means the lakes that provide the water for this generation can also be low.

My home

Retail market

Retailers

Retailers

If your retailer asks you to save electricity, they need to compensate you.

Distribution

Transmission

Wholesale market

Wholesale market

There are a range of wholesale market mechanisms in place to ensure electricity retailers proactively manage risk during a dry year.

Generation

Generation

Hydro lakes only hold enough water for a few weeks of winter energy demand so hydro generation is sensitive to levels of rainfall and snowmelt.

Close

There are a wide range of measures in place to ensure a reliable electricity supply in this situation.

The responsibility for managing electricity supply during a dry year sits with the electricity industry. Most residential consumers should not be impacted unless they buy their electricity at spot prices, as prices will increase if water is scarce.

In an extremely severe event, a public conservation campaign may be called. This means all consumers will be asked to use less electricity. If this happens, electricity retailers must pay compensation to their customers. The rate for this compensation is currently set at $10.50 per week, per customer.

The Authority developed and now monitors a range of regulatory measures to help effectively manage the risk caused by dry years.

The Authority also provides a wide range of data through its EMI site to help the electricity industry monitor and plan.